Sinatra may have found success in the city that never sleeps, but a California court has just made it more difficult for any party doing business with a California resident to do the same. At least, when it comes to resolving disputes without a jury in a New York courtroom, or in the courtroom of any other jurisdiction that enforces pre-dispute jury trial waivers. This case will be of major interest to commercial lenders, and other businesses, who prefer to use New York as their jurisdiction of choice for governing law and adjudicating disputes. Continue Reading
Fall Season Results in California Coastal Commission Victories
This Fall, the California Coastal Commission (“Commission”) was handed down two significant victories, further cementing its authority and jurisdiction within California coastal zones. These cases demonstrate that, in certain instances, compliance with the California Environmental Quality Act (Pub. Res. Code §§ 21000 et seq.) (“CEQA”) and local regulations may not be enough to secure development rights for either private developers or local governments. Continue Reading
New Law Aimed At Assisting Low Income Renters Invokes Additional Restraints on California Landlords
Posted in New Rules and Legislation, OtherAs part of his last legislative act of 2019, Governor Newsom signed 18 housing-related bills into law in an attempt to alleviate California’s housing crisis. This package included Senate Bill (“SB”) 329, which prohibits landlords from denying prospective tenants based on their use of certain federal, state, or local subsidies. Continue Reading
EPA and Army Repeal Clean Water Rule and Move Forward with Plan to Redefine Waters Subject to Federal Regulation under Clean Water Act
The U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) published a rule on October 23, 2019, repealing the Clean Water Rule promulgated by the Obama administration in 2015. The rule, which goes into effect on December 23, 2019, puts the pre-2015 regulations governing areas subject to federal jurisdiction under the Clean Water Act back into place nationwide. Environmental groups and state attorneys general have vowed to challenge the repeal in court. Continue Reading
California’s “Housing Crisis Act of 2019” May Boost Housing Production or Just Boost Housing-Related Litigation
On October 9, 2019, Governor Newsom signed into law Senate Bill (SB) 330, or the “Housing Crisis Act of 2019” in an effort to combat California’s current housing shortage, which has resulted in the highest rents and lowest homeownership rates in the nation. In a nutshell, the Housing Crisis Act of 2019 seeks to boost homebuilding throughout the State for at least the next 5 years, particularly in urbanized zones, by expediting the approval process for housing development. To accomplish this, the Housing Crisis Act of 2019 removes some local discretionary land use controls currently in place and requires municipalities to approve all developments that comply with current zoning codes and general plans. If not extended, SB 330 will only be effective from January 1, 2020 through January 1, 2025. Continue Reading
FERC Proposes Major Changes to PURPA Regulations Impacting Qualifying Facility Rates and Requirements; Throwing Roadblocks in the Path of Renewable Energy Development
Posted in EnergyThe Federal Energy Regulatory Commission (“FERC”) requested comments on a proposed rulemaking to revise its regulations under the Public Utility Regulatory Policies Act of 1978 (“PURPA”). The Notice of Proposed Rulemaking (“NOPR”), among other things, would diminish benefits that have been afforded to Qualifying Facilities (“QFs”), including the availability and value of the “PURPA-put.” The proposed changes also could potentially block certain wind and solar projects that previously would have qualified as small power production facilities from receiving that designation. The NOPR presents uncertainty for renewable developers, as well as other non-utility generators. Adoption of the proposed changes may hinder the development of some renewable energy projects. Comments on the proposed rulemaking are due within 60 days of its publication in the Federal Register. Continue Reading
Proposed Rule Expands CFIUS Jurisdiction to Real Estate Investments That Pose a National Security Risk; Could Have Major Impacts on Dealmaking
Posted in New Rules and LegislationKey Takeaways:
- What is CFIUS? The Committee on Foreign Investment in the United States, or CFIUS, is an interagency committee chaired by the Secretary of the Treasury which is authorized to review and approve transactions involving foreign investment in the United States that could impact U.S. national security.
- Expanded Jurisdiction. The Treasury Department has issued a new proposed rule (Proposed Rule) conferring jurisdiction on CFIUS for specific real estate transactions in the U.S. subject to certain exceptions and carve-outs. While CFIUS previously considered real estate investments on an ad hoc basis, the new rule codifies CFIUS jurisdiction and the scope of its review for real estate transactions involving foreign buyers/investors.
- Location, Location, Location. CFIUS review will focus on real estate near airports, maritime ports, U.S. military installations, and other facilities or properties of the U.S. Government.
- Exceptions for Certain Real Properties. CFIUS generally will not review real estate transactions involving a single housing unit or real estate in “urbanized areas.”
- To File or Not to File. The decision whether to file or not to file a notice with CFIUS for a real estate transaction will be voluntary. Thus, parties to a real estate transaction involving foreign buyers/investors cannot be found to violate the law for failure to file a CFIUS notice. However, if parties to a real estate transaction where CFIUS has jurisdiction do not file a notice and obtain clearance from CFIUS, they risk action by CFIUS at any time in the future, including a forced unwinding of the transaction. Accordingly, many parties may prefer the “safe harbor” of obtaining CFIUS clearance because CFIUS is precluded from re-examining a cleared transaction.
- Public Comment Period Now Open. Members of the public can comment on the Proposed Rule now through October 17, 2019. Final regulations will become effective no later than February 13, 2020
Statewide Residential Rent Control Passed In California
The California Legislature has passed AB1482 providing for comprehensive statewide residential rent control and eviction protections and sent it to the Governor for signature, which is expected. Commencing January 1, 2020, AB1482 prohibits a landlord of a residential property from increasing the gross rental rate more than five percent (5%) plus the percentage change in the cost of living, within a 12-month period. AB1482 also requires a landlord to evict a tenant only for “just cause” if the tenant has occupied the property for more than 12 months. AB1482 will be effective only until January 1, 2030. However, AB1482 also contains exemptions from the rent cap and just cause eviction provisions. Continue Reading
Politics Trumps Economics? Trump’s Revocation of California’s Waiver Under the Clean Air Act
Posted in Environmental, Global Climate ChangeToday President Trump announced on Twitter that the U.S. was revoking California’s waiver under the Clean Air Act (CAA) which allowed it to impose stricter tailpipe emission standards than the federal ones. California’s Governor Newsom and Attorney General Becerra immediately announced that the state would file suit to challenge the revocation.
While the revocation has been characterized as an immediate rollback, the federal corporate average fuel economy (CAFE) standards[1] established under the previous administration, which are consistent with California’s, remain in place. Last year the Trump administration proposed to rollback those standards, freezing the efficiency and emission rules in 2021 and canceling further increases in stringency set through 2028. The final rule has not yet been issued. It is rumored that it will not be, as the administrative record supporting it has many problems and most acknowledge that it faces significant legal hurdles. Continue Reading
Endangered Species Act Rulemakings Face Immediate Challenge
On August 27, 2019, the U.S. Fish and Wildlife Service and National Marine Fisheries Service (collectively, the “Services”) published final rules amending three important parts of the federal regulations that implement the Endangered Species Act (16 U.S.C. §§ 1531 et seq.). The amended rules, which will take effect on September 26:
